Yesterday CMS published an alert notifying group health plans that it
is changing the Medicare Secondary Payer reporting requirements for
HRAs by increasing the threshold at which an HRA is required to
participate in MSP reporting from $1,000 to $5,000. HRA coverage that
reflects a benefit of less than $5,000 per year (including any roll-over
contributions from the previous year) will not be required to report
MSP data effective with the start of the HRA's first plan year on or
after October 3, 2011. While this is good news for HRA sponsors with
lower thresholds, HRA sponsors should note that the reporting exemption
does not mean that HRAs with annual benefits of less than $5,000 are
exempt from the general MSP payment policies and it will not change the
primary payer status of the HRA coverage.
The alert also notifies HRAs required to participate in MSP reporting
of a new reporting requirement. A notice of termination must be
submitted when an insured has exhausted his/her HRA balance and no
additional funds will be added for the remainder of the coverage year.